Lease Agreement No Sword or Shield In Personal Injury Claim by Tenant’s Employee (NY)

When a tenant’s employee gets injured due to an alleged dangerous condition of leased property, there can be a tangled web of who is responsible.  The injured party will collect workers compensation from the employer, but then will often look to the property owner in civil litigation. Whether the owner is liable will turn in large part on what the lease says, in particular with respect to such issues as maintenance responsibilities and indemnification. However, even the lease may not be totally dispositive.

In Echevarria v 158th St. Riverside Dr. Hous. Co., Inc., the plaintiff sued the owner of property for injuries she sustained while attempting the repair of a crack in a terrace door.  She was hit by the door when it closed due to a gust of wind and knocked off of a stool.  Plaintiff was an employee of Gould Services, who leased the unit at issue from an unidentified nonparty to the action.

The owner of the building, Riverside, argued in a summary judgment motion that, pursuant to an occupancy agreement, it had no duty to repair the door. However, the occupancy agreement required Riverside to repair “partitions,” and the Court questioned whether the door could be considered a partition.  Additionally, there was evidence that Riverside had previously made repairs to that same door, suggesting that any provision in the occupancy agreement requiring the unit owner to repair the door might have been modified by the parties’ subsequent course of conduct. Irregardless of the language of the agreement then, Riverside had assumed responsibility to maintain the door.

Riverside also raised an issue as to notice.  However, the Court held that evidence that the plaintiff and her supervisor had reported the crack in the door to Riverside’s maintenance men and security guard about one month prior to the incident created a question of fact that precluded summary judgment.

On the other hand, the First Department granted summary judgment to the plaintiff’s employer on the basis of the workers compensation bar.  New York’s  Workers’ Compensation Law § 11 prohibits most third-party claims for indemnification against an employer for injuries sustained by an employee acting within the scope of employment, except when the employee has sustained a “grave injury,” or when there is a “written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to . . . indemnification of the claimant”

Riverside argued that the occupancy agreement contained such an indemnification clause.  The problem was that the agreement was with Gould Foundation but the plaintiff was an employee of Gould Services.  Although Riverside sued Gould Foundation, it accepted an answer filed on behalf of Gould Services and never contested its relationship to the actual indemnitor.  The Court simply did not buy Riverside’s argument that the agreement was sufficient to bind the employer.  Thus, the appellate court affirmed summary judgment for the employer.

The lesson of the case is that while it is critical to understand the terms of a lease in such a case, the analysis does not end there.  The courts will look to the pattern of behavior of the parties to determine what responsibility each has to maintain the premises.

Special thanks to Johan Obregon for his contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.